31st July, the last date to file Income Tax Returns (ITR) is soon approaching. There is still time to avoid paying a penalty or receiving tax notices on the grounds of not filing returns. True, filing tax returns is a difficult task! You have to be mindful of various sections, schedules and lists while filing tax returns. In addition, you also need to furnish certain documents as evidence.
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Tax filing requires you to recall and keep track of spending, saving and return from investments. Just recalling these details is not enough. What purpose will it serve without any proof? Every transaction is required to be backed by evidence. Keeping all the necessary documents handy will ease the process of filing ITR.
In this article, we will bring to your notice the documents required when filing ITR:
This is one of the most important documents for a salaried individual to file ITR. This document issued by an employer mentions details of salary paid and TDS deducted on it, if any. An employer has to compulsorily issue Form 16 to employees on deduction of TDS from salaries. If no TDS is deducted, an employee can place a request for the issuance of this form.
Salaried taxpayers are required to provide the salary break-up in the ITR Form 1. Form 16 makes it easy to determine the salary breakup.
So, what is this breakup?
Form 16 has two parts:
Salaried taxpayers are also required to furnish details of taxable allowances like House Rent Allowance, Transport Allowance and so on.
These details are available in your salary slips. You can add each allowance received during the year and calculate the taxable portion. Each allowance received has a different tax treatment:
If you have received interest from savings bank accounts, post office savings accounts, fixed deposits and recurring deposits, you must obtain interest certificates from the respective financial institutions.
An alternative to the interest certificate is an updated passbook which shows details regarding the interest credited to your account.
These forms are issued when TDS is deducted on income earned apart from salary. Form 16A is issued in case TDS is deducted on interest received from fixed deposits, recurring deposits, and so on. The buyer of a property issues Form 16B, showing the TDS deducted on the amount paid to the seller. Form 16C is issued by a landlord receiving rental income.
Form 26AS is like a tax statement that consolidates your annual taxes. Form 26AS mentions details of the following taxes deducted or deposited against your PAN:
Investments or expenditures made which enjoy the section 80C, 80CCC and 80CCD (1) tax deductions, lower your tax liability. You can claim a combined maximum of Rs 1.5 Lakhs, under these three sections.
Apart from investments and expenditures which enjoy the Section 80C benefit, you can claim a deduction for expenses like health insurance premiums under Section 80D for a maximum of Rs 25,000 a year. If you have paid your parent’s health insurance premiums, you can claim an additional deduction of Rs 25,000 (for parent’s aged below 60) or Rs 50,000 (for parents aged 60 years or above). Interest paid on education loan can be claimed under Section 80E up to any amount.
Collect a Home Loan statement if you have availed a Home Loan from banks/NBFCs or other financial institutions. The statement gives you a break-up on how principal and interest are repaid. Interest repaid on the home loan can be claimed under Section 24 to a maximum of Rs 2 Lakhs a year.
Any capital gains earned from the sale of property/mutual funds should be reported while filing ITR. In case of capital gains earned on the sale of property, purchase deed and sale deed is required to compute capital gains. In case of capital gains earned on the sale of mutual funds/shares, you will require statements from mutual fund houses or brokers.
It is mandatory to provide Aadhaar details in order to successfully file ITR according to Section 139AA of the Income Tax Act. Aadhaar enrolment ID can be provided if you have applied for the Aadhaar and not received it.
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